Türkiye’s construction sector continued to experience significant cost pressures in May 2025, with the Construction Cost Index (CCI) rising by 22.40% year-on-year, according to data released by the Turkish Statistical Institute (TurkStat).

On a monthly basis, the index posted a 0.88% increase compared to April, the agency noted.

The rise was driven by both material and labor costs. The material index saw a monthly increase of 1.09%, while the labour index rose by 0.52%. Annually, materials became 17.81% more expensive, and labour costs surged by 31.39%, reflecting continued inflationary pressure in the sector.

The Building Construction Cost Index—a key subcomponent of the CCI—also recorded a notable uptick. Costs rose by 0.81% on a monthly basis and by 22.46% compared to May 2024. The material index for building construction increased by 1.08% from the previous month and by 18.24% year-on-year. Labour costs in this segment grew more moderately month-on-month at 0.35%, but showed a sharp annual increase of 30.40%.

Meanwhile, the Civil Engineering Construction Cost Index experienced the highest monthly increase, climbing 1.11% in May. Annually, costs in this category were up 22.20%. Both material and labour indices for civil engineering rose 1.11% and 1.12%, respectively, from the previous month. Year-on-year, materials in civil engineering projects increased by 16.46%, while labour costs jumped by a significant 35.03%.

The latest data reflects ongoing cost burdens faced by the construction industry amid high inflation, wage increases, and volatile material prices. Industry analysts note that these rising costs may impact project budgets and timelines across residential, commercial, and infrastructure sectors.

Despite government efforts to stabilize inflation, the sector remains sensitive to global commodity prices and domestic wage dynamics. Developers and contractors are expected to adjust planning and bidding strategies to navigate the cost landscape in the months ahead. (ILKHA)